The price of heritage properties has been pushed to higher high since Penang Georgetown was declared by UNESCO as one of the world heritage site in July 2008. Since then, more and more demand in heritage properties arising in the market for preservation purpose and of course investment opportunity. The usually nobody-wants-to-buy old houses suddenly receive many greater offers. That causes the inflation of profit taking mindedness among house vendors. But, how much shall a buyer pay for a house ? At least a reasonable price ? How much is a reasonable price ?
In fact, there has been a debating topic about how much should a property worth especially heritage houses. Whenever I been asked about the moderate price matter, I cannot be biased. So I always tell my clients, "Well, the best and fastest way you want to know is to appoint a valuer to measure and give you report about that."
Valuers are professional that provides guideline for you, preventing you from paying too much that you should. I always seek advice from valuers whenever a house owner is not sure about the price tag he should put to sell his house. I really appreciate my valuer friends gave me the price that my owners sold in satisfactory.
However, there are aggresive and conservative valuers in the market. In my experience, many conservative valuers tend to suggest around RM250 to RM270 per square foot (As in June 2009) for heritage houses, regardless the renovation work in the house. And also the another group aggresive valuers would recommend from RM300 to RM370 per square foot (As in June 2009) to heritage properties. Just for your information, recently there was a unit of decent looking double storey heritage house with 1600sf land area in Lebuh Acheh (Acheen Street) transacted at close to RM700K. Figured RM425 per square foot. Surely it was way unreasonable from the point of view in valuers and myself. But the important point is......there are buyers willing for that price.
What about renovation in the house and those antique like 2 hundred years old door, victorian styled wall tiles and early 19th century of title sold with the house ? Can valuers give higher value from that ? No ! To valuers, these are meaningless. But I can tell you a house with those added value surely will sell better and more demanded comparing to those without.
Valuers don't decide the market price. It is from the sellers and buyers. Valuers usually base on the previously transacted price from properties nearby to suggest the value of a property, therefore the price from valuers will never catch up the market price. That is the reason why the properties you want to buy are always overpriced.
In my situation as a real-estate agent in front line, everyone wants to buy low and sell high, you may still to spend some time for hunting a bargain buy. But, fortunately and yet unfortanately.... it is undeniable that the landed properties price in Penang goes up everyday. By the time you find a cheap house, that may not be cheap already. And the quantity of heritage houses is getting lesser, you just can't build another new heritage house.
So, in bottom, every heritage houses is unique. As you are lucky enough to find a heritage property that you like, and if the price is not over too much from the paper value suggested from your valuers. You should consider it. Else, you probably may be spending much more money, time and effort to look for another similar house that you like. Or end up just to give up finding like many of my previous clients. After all you are very confident that in the long run, landed properties especially heritage houses will return you handsome capital appreaciation.
Regards,
Raymond Loo
06-Jun-2009
